August 21, 2014 / 10:17 AM / 3 years ago

UPDATE 1-Russian shares edge up, VTB shrugs off weak results

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MOSCOW, Aug 21 (Reuters) - Russian shares moved slightly higher on Thursday, extending a nine-day rally, with VTB Bank shrugging off disappointing first half results to outperform the market.

At 0930 GMT, the dollar-denominated RTS index was up 0.1 percent to 1,259 points, while the rouble-based MICEX traded 0.3 percent higher at 1,452 points.

Analysts said the rally was linked to hopes of a de-escalation of the crisis in neighbouring Ukraine. Russian President Vladimir Putin and Ukrainian President Petro Poroshenko were due to meet on Aug. 26 in Minsk to discuss the situation in eastern Ukraine, where fighting is continuing between pro-Russian rebels and government forces.

"Investors are hoping for a weakening of geopolitical tensions ahead of the meeting in Minsk," Zerich Capital analyst Andrei Vernikov said in a note.

"Buying shares on the hope of the success of the negotiations in Minsk after the failure of negotiations in Kiev, Geneva and Berlin is very naive. There need to be other drivers for the growth of the market."

Domestically-oriented stocks such as banks in general outperformed the market, while major Russian energy exporters underperformed, weighed down by a Finance Ministry plan to raise Mineral Extraction Tax next year. Leading bank Sberbank was up 1 percent while top oil firm Rosneft rose just 0.1 percent.

Shares in VTB Bank rose 1.4 percent despite the bank reporting an 82 percent slide in first-half profit. VTB had been up 2.1 percent earlier in the day ahead of the results.

"The results didn't justify expectations - net profit noticeably fell and was around half forecasts," Olma analyst Ruslan Unisov said in a note.

Fertiliser producer Phosagro was up 1.9 percent after publishing results which showed a 70 percent rise in first-half net profit.

The rouble edged down further against the dollar, which was boosted after minutes of the U.S. Federal Reserve's July meeting sounded slightly hawkish.

The Russian currency was 0.1 percent weaker against the dollar at 36.34 and down 0.07 percent against the euro at 48.21. The rouble was 0.15 percent weaker at 41.69 against the dollar-euro basket.

For rouble poll data see

For Russian equities guide see

For Russian treasury bonds see

Russia in graphics: (Reporting by Jason Bush and Alexander Winning; Editing by Andrew Heavens)

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